PeteEU

I bet the people who listen, are the people who already have a negative view of Europe (and pretty much anything non american), thats my point. Look at the comments here from Americans already. And I know fully it was baiting us Euro's and they will probally go all out against us as usual when they wake up.

If you look at the crtic of his opinion piece, then they all hit at the points I made and even more points, and yet when you look at all the anti European right wing blogs, and rags from the US, they almost all praise the opinion piece as gosbel.

Yes Forbes is not a simple rag, but it also not an "unbiased" newsource by any measure of the standard.

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PeteEU

Arcana XV

Agreed. He seems to be more in tune with American capitalism than with the European version (yes, people, we DO have capitalism in Europe ). I'm not surpised the right-wing blogs are eating this up. It keeps them safely and comfortably entrenched in their position and saves them from having to think outside the box.

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"Yes, but are you a Protestant atheist or a Catholic atheist?".- Northern Irish joke

Voidwar

Well if that ain't the pot callin the kettle black I don't know what is.

donsutherland1

It should also be noted that Spain had among the bigger real estate bubbles in Europe. That the bubble is now contracting is not really all that surprising. Even if the U.S. were not embroiled in its own housing-led downturn, Spain's housing bubble presented a significant risk to the Spanish economy.


Source: International Monetary Fund

PeteEU

Well the Spanish "bubble" is different than the American.

Spain is the worlds second biggest tourist country after France, and the "bubble" was not created for domestic use only. A very large, if not majority, was built for holiday homes for the rest of Europe. Now the problem itself is on many levels. Housing prices have gone up and up, which has attracted the speculators on top of the serious holiday home buyers. In the area I live, we have at least, 200.000 Brits, over 50.000 Germans, same amount of French and many other nationalities. Total population last count in the province is 1.4 million. So you see there has been a basis for the building boom, but there has also been a massive over production of homes.

This has in many ways pushed the Spanish themselvs out of the housing market in many major cities and tourists areas, which has created the 30+ aged children living with thier parents.

Now the correction has set in and the prices are falling in a number of places. Now the ones that are gonna loose out is the building industry. The big building companies are gonna loose out and the market will contract, but considering a large part of the industry is drivien by non spanish labour, the spanish labour market will not be hit that baddly as some might expect, but it will be hit of course, due to secondary industries feeding the building industry.

The other part that will be hit are the speculators.. but who cares about them frankly. And considering quite a lot of them are rumored to be linked to the Russian and other eastern bloc mobs, plus Hells Angels and other drug runners, then well... who cares.

The worrying thing will be those who bought holiday houses on mortages, and now the value of the house is going down to below what they have loaned, but thats a worrying thing all over Europe.

But personally I think the biggest threat is the clean up in the massive amount of corruption during the 1990s in the Spanish building market. There is serious talk in one small county area near where I live in that 50000 homes are to be demolished because they break various planning laws, that previous corrupt local goverments have "ignored" or given the okay after reciving bribes. In total we could see several hundred thousands homes being torn down, including hotels and what not, due to this corruption.

Personally I think its healthy for the Spanish economy to get a correction in the housing market, because the amount of homes built and the prices have been insane. Spain has built more homes every year for over a decade than the UK, France and Germany COMBINED, and that is frankly insane dispite there being a housing shortage after Franco.

donsutherland1

Voidwar

Wouldn't it be more accurate to say that the wealthy of France, Germany, and the U.K. built those homes ?

PeteEU

No, it would be highly inaccurate in fact. Yes there are a number of "wealthy" from all over Europe who have secondary homes in Spain, but a large majoirty of them are random mom and pop who have a holiday flat as an investment and cheap holiday home. My parents are a classic example. Quite a large number of pensioners, rich and middle class, also have second homes or even primary homes in Spain simply for the weather.

Also I forgot to mention the "spanish rich", who also bought second homes on the Costa del Sol and other "warm in the winter" areas of the country. It was not only the outsiders buying and building homes..alot from Madrid and Barcelona and other major cities.

PeteEU

Actually it might be, but the economists and politicans are afraid to go that way. You see Spain has way over 50% of ALL the 500 Euro notes in circulation. The 500 euro note is the second biggest note (1000 euro is biggest), but the biggest one that is commonly circulated. Now the reason for this is debated, but most people agree, its because of organized crime from around Europe (mostly Eastern Europe) sending thier money to Spain to be laundard in the Spanish property market. This drives the house prices up even more than it should be, because of spectulators like this.

Well one can hope, but I would not be supprised if only a small and well known bit only gets cleaned up. Marbella (the rich mans holiday town for the last 30+ years) is the biggest case so far. Here we are talking over billion euros in bribes and corruption over a long period. But you say undermine efficient resource utilzation.. well, consider this. Due to the corruption, the boom in Spain has been much much bigger than one would have thought, hence driving up prices.

Voidwar

Thats funny, the stuff I quoted from you earlier supports my take on things, as does this "explanatory" paragraph . .

If more homes were built in Spain than France Germany and the U.K. over the timespan you mention, and the average Spaniard cannot move out till hes 30, then it is foreign money that bought the homes, and thus created the demand for the slew of new housing, thus, the wealthy of France Germany and the U.K. paid to have those homes built.